To apply, you must:
10 Illinois Dealer License Requirements
Illinois Dealer Licenses are issued by the Illinois Secretary of State, Vehicle Services Department, Dealer Licensing Section. This page covers Illinois's 7 Dealer License types, their requirements, bond size, costs, and how to apply.
Name your Dealership
Your company name is the first step, because you use it through the entire Dealer License process. Illinois's Dealer License Application accepts a proprietorship, partnership, corporation, or trust, with a write-in box for any other business form. The licensing statute names LLC members alongside partners, so an LLC qualifies (625 ILCS 5/5-102.5(b)).
An LLC keeps your business separate from your personal life and adds trust to the name.
Settle who owns the business before you file. Illinois doesn't transfer a Dealer License: when ownership changes, the new owners apply for their own license.
Choose your Dealer License Type
Illinois's Dealer License Application lists 7 license types, and you mark one. There is no wholesale, auction, or broker box. The Secretary of State says so outright: “The State of Illinois does not issue either a ‘wholesale license,’ an ‘auction license,’ or a ‘broker license.’” Illinois has about 6,000 licensed vehicle dealers.
| License Type | What It Lets You Do |
|---|---|
| Used vehicles onlyThe type most people start with | Buy and sell used vehicles. Requires the 8-hour pre-license class (625 ILCS 5/5-102). Motorcycles, trailers, and manufactured homes have their own types |
| New and used | Sell new vehicles under a franchise agreement, plus used. No pre-license class (625 ILCS 5/5-101), and the license also counts as a repairer license |
| Buy Here Pay Here used vehicle dealer | One license to sell and finance used vehicles, when the financing company is affiliated with the dealership (625 ILCS 5/5-102.8). Requires the 8-hour class |
| Motorcycles | Buy and sell motorcycles |
| Trailers | Buy and sell trailers. Exempt from the liability insurance requirement |
| Manufactured home dealer | Sell manufactured homes. Requires a $150,000 bond instead of $50,000 |
| Salvaged dealer designation | For dealing in salvage vehicles. Marked on the same application |
Get your Dealer Bond (Surety Bond)
An Illinois Dealer License requires a $50,000 bond or certificate of deposit for each location, the same amount for new and used vehicle dealers (625 ILCS 5/5-102(b)(8)). The bond guarantees that the title and registration fees and taxes you collect from customers reach the state.
A $50,000 Dealer Bond costs only $500 a year, after a credit check. You file it with the Secretary of State with your application. It expires no sooner than December 31 of the license year, the same day your license does.
Dealer 101 Insurance Services
Licensed in Illinois · NPN 22346185
| License Type | You Pay | Bond Amount |
|---|---|---|
| Used vehicles onlyIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| New and usedIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| Buy Here Pay Here used vehicle dealerIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| MotorcyclesIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| TrailersIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| Salvaged dealer designationIllinois - Motor Vehicle Dealer Designated Agent ($50,000) | $500/yearabout $42 a month | $50,000 |
| Manufactured home dealerIllinois - Motor Vehicle Dealer Designated Agent for Manufactured Homes ($150,000) | $1,500/yearabout $125 a month | $150,000 |
Get your Dealer Liability Insurance
An Illinois Dealer License requires liability insurance for every location: $100,000 per person, $300,000 per crash, and $50,000 for property damage (625 ILCS 5/5-102(b)(4)). The limits are the same for new and used vehicle dealers. Those are the limits of the policy, not the cost; your insurance agent quotes the price.
You file a Certificate of Insurance in the business name and location with your application, from a company authorized in Illinois. The policy must not expire before December 31. Trailer and mobile home dealers are exempt.
Set up your Dealer Office
An Illinois Dealer License requires an established place of business in a building “permanently mounted on a fixed foundation” (92 Ill. Adm. Code 1020.10). It cannot be in a residence. No minimum lot or building size is published. The table below is the state's own standard, and it applies to all 7 license types.
| What Illinois Requires | |
|---|---|
| Building | “Permanently mounted on a fixed foundation,” not a trailer with its axle still attached. The instructions add: the dealership's address and phone number “cannot be the same as your residence” |
| Office | “Properly and permanently equipped with the necessary office equipment and machines” for keeping your books and records |
| Phone and power | “An operating telephone for inbound and outbound calls,” with the number listed in the local telephone directory. Operating electricity and adequate lighting |
| Sign | The dealership name on the front entrance door, plus a permanent sign visible from the highway, lit if you are open after dark |
| Lot or showroom | A lot “surfaced with rock or better surface material,” lit if open after sundown. An indoor showroom, properly illuminated, replaces the lot requirement |
| Hours | Open at least 5 of every 7 days, at least 4 consecutive hours a day |
| Zoning | A Notice of Proper Zoning (VSD 481) from your local government. In Chicago, a copy of your city business license is accepted instead |
Attend the Dealer Training Class — Used and Buy Here Pay Here dealers
An Illinois Used vehicles only or Buy Here Pay Here license requires 8 hours of pre-license education, completed before you submit the application (625 ILCS 5/5-102.5). At least one owner, officer, member, or partner attends. New vehicle dealers, banks, rental companies with a national franchise, and auction companies are exempt. Illinois has no separate Dealer exam.
The Secretary of State teaches the class itself, 8 a.m. to 5 p.m. There is no class fee. Instead, you send the license fee itself at least 2 weeks before your class date: $1,000, or $500 if the class is June 16 or later. If the office hasn't received it, you can't attend.
You get a completion certificate, and you post it at your principal office.
Pass the Background Check (Live Scan)
Every Illinois Dealer License applicant completes a criminal background check through an Illinois State Police-approved live-scan fingerprint vendor (625 ILCS 5/5-105). You submit the vendor's receipt with your application; an application without it is returned. The vendor sets the fee. For the vendor list, call the Illinois State Police Bureau of Investigations at 815-740-5160.
If you have a record
- Not automatic in the law. The Secretary of State “may” deny (625 ILCS 5/5-501). Its own training page says a forcible felony in the last 10 years means denial
- The crimes that count. Forcible felonies, theft, deceptive practices, money laundering, and criminal trespass to vehicles. Theft and deceptive practices count even as misdemeanors
- Waiting period. 10 years, counted from when the offense was committed, back from the date you apply
- Disclose it. The application asks whether any officer, director, owner, or partner has been convicted of a felony, and you sign before a notary. A completed court supervision is not a conviction (730 ILCS 5/5-6-3.1)
- If denied. Ask for a hearing in writing; the Secretary of State sets a date within 20 days, to begin within 90 days (625 ILCS 5/2-118). A felony for dealing in vehicles or titles can cancel a license without a hearing
Submit your Dealer License Application
You apply on paper with the Dealer License Application (VSD 324), signed before a notary and sent to the Secretary of State in Springfield. Illinois has no online dealer application. The license fee is $1,000 for the year, or $500 if you file after June 15, and every other fee is itemized under costs.
The application asks each proprietor, partner, member, or trustee for a driver's license number and date of birth, not a Social Security number. It also lists the dealership's agent or legal representative who is an Illinois resident (625 ILCS 5/5-102(b)(12)).
Pass the Site Inspection
The Secretary of State inspects your place of business after it reviews your application, fees, bond, and insurance, and before the license is issued. Its office schedules the appointment. The inspector checks that the location meets the office standard above.
Get your Dealer License Plates
Illinois dealer plates cost $45 for a master set and $13 for each duplicate set, from the Secretary of State (625 ILCS 5/3-602). No cap is published; you order additional sets on form RTDS 43. Dealer tags let you drive your inventory without registering it.
You can drive a plated inventory vehicle for any purpose, as long as it stays a demonstrator. Illinois attaches that rule to the vehicle, not to who is driving (625 ILCS 5/3-601(h)). The limits, from 92 Ill. Adm. Code 1010.450:
- Not on a vehicle used permanently as a personal vehicle rather than a demonstrator
- Not for driving to and from school
- Not on a vacation trip outside your normal business area for more than 25 days
- Not on a vehicle used 25 or more days as a personal vehicle by someone who isn't your employee
- Not on a vehicle kept at a military base by a service member
- Never on a rented vehicle, a for-hire vehicle, or a dedicated work or service vehicle
Dealer License Cost
An Illinois Dealer License costs $1,000 a year, or $500 if you file after June 15, for new and used vehicle dealers alike. That fee is higher than most states. Every other fee on this page is in the table.
| Fee | Amount |
|---|---|
| Dealer License, new or used | $1,000 a year$500 if filed after June 15$50 each additional location, used vehicle dealer ($25 after June 15)$100 each additional location, new vehicle dealer |
| Dealer Recovery Fund fee, first applicationA state fund fee paid with the license fee | $500, plus $50 each additional location$250 if filed after June 15, plus $25 each additional locationWaived if you sell 25 or fewer automobiles a year |
| Dealer Recovery Fund fee, renewalTiered by last year's sales | $0 for 25 or fewer automobiles sold$150 for 26 to 199$300 for 200 to 299$500 for 300 or more |
| Dealer Bond | $500 a year, $50,000 bond, credit check required$1,500 a year, $150,000 manufactured home dealer bond |
| Liability insurance | $100,000 / $300,000 / $50,000 policy, priced by your agent |
| Pre-license class | No class fee; the license fee is prepaid before the class |
| Live-scan fingerprints | Fee set by the vendor |
| Dealer plates | $45 master set$13 each duplicate set |
| Amendment to a filed application | $2 |
Dealer License Renewal
An Illinois Dealer License expires December 31 every year, no matter when it was issued (625 ILCS 5/5-102(g)). A license issued in November renews within weeks. Renewal notices go out in September. A renewal filed in December keeps the license in force until the Secretary of State decides.
Renewal uses the same license fee as a new application. The Dealer Recovery Fund fee drops to a tier based on last year's sales, from $0 to $500.
Common Questions
Can you get an Illinois Dealer License with a felony?
Yes, with limits: Illinois denies a Dealer License for a forcible felony in the last 10 years, and other felonies are not an automatic bar. The law says the Secretary of State “may” deny for a forcible felony, theft, deceptive practices, money laundering, or criminal trespass to vehicles (625 ILCS 5/5-501). More under Background Check.
Can you get a Dealer License in Illinois without a lot?
Illinois requires a building for every Dealer License type, and it can't be your home. The office must be “permanently mounted on a fixed foundation,” and the instructions say it “cannot be located in a residence.” You can skip the outdoor lot with a properly lit indoor showroom (92 Ill. Adm. Code 1020.10). Illinois issues no wholesale license.
How many cars can you sell in Illinois without a Dealer License?
In Illinois, you can sell up to 4 used vehicles in a year without a Dealer License. Selling or dealing in 5 or more used vehicles in the year requires a used vehicle dealer's license (625 ILCS 5/5-102(a)). Illinois has no personal-use exemption.
Does Illinois have a wholesale Dealer License?
No, Illinois issues no wholesale Dealer License. In the Secretary of State's own words, the state “does not issue either a ‘wholesale license,’ an ‘auction license,’ or a ‘broker license’” at all. To buy at the dealer-only auctions, you get a Used vehicles only or New and used license, with an established place of business.
How do you get an auction license in Illinois?
Illinois issues no “auction license” for buying at dealer auctions, and a Dealer License “will not be issued for the sole purpose of attending dealer auctions.” A Dealer License with an established place of business is what gets you in. Running auctions of vehicles other people own is a separate Vehicle Auctioneer license (625 ILCS 5/5-700).
How long does an Illinois Dealer License take?
No Illinois law sets a deadline; the statute says “within a reasonable time.” The Secretary of State's own guidance is 2 to 4 weeks for processing and its investigation. The inspection of your place of business comes before the license is issued.
Do I have to renew an Illinois Dealer License every year?
Yes, every Illinois Dealer License expires December 31 of the year it was issued. A license issued in November renews within weeks. Renewal notices go out in September. Details under Dealer License Renewal.
Do I need a business bank account?
No, Illinois doesn't require a business bank account for a Dealer License. The statute, the Dealer License Application (VSD 324), and its instructions never ask for one.
Support
Dealer Licensing takes no walk-in visitors; call or mail instead. Application questions have their own line, and the training class has its own contact.
| Contact | Detail |
|---|---|
| Department | Illinois Secretary of State, Vehicle Services Department, Dealer Licensing Section |
| Phone | (217) 782-7817 Dealer Licensing(217) 782-5354 new and renewal application questions(217) 785-2050 Dealer Training |
| [email protected], for the training class | |
| Address | 501 S. Second St.Springfield, IL 62756 |
Additional sources (10)
The forms and the portal for each step are linked in the steps. These are the law, the rules, and the agency pages the page was checked against.
- 625 ILCS 5/5-101, new vehicle dealers — the same $50,000 bond and insurance limits as used dealers, $100 per additional location, no education clause, and the December 31 expiration
- 92 Ill. Adm. Code 1020.10, established place of business — the full office standard: building, office, telephone, sign, lot or showroom, and hours
- 92 Ill. Adm. Code 1010.450, dealer plate restrictions — the personal-use limits in the Plates section
- Secretary of State vehicle FAQ — the $1,000 license fee, plate prices, the December 31 renewal, the 2 to 4 week processing time, and the no-transfer rule
- 625 ILCS 5/5-102.1, off-site sales and displays — where a Dealer may not park a vehicle for sale, and the off-site sale and exhibition permits
- 625 ILCS 5/2-118, hearings — the written-request hearing right after a denial
- 730 ILCS 5/5-6-3.1, supervision — a completed supervision “shall not be termed a conviction”
- 625 ILCS 5/5-301, repairers, rebuilders, parts recyclers, and scrap processors — the combined license and its federal tax ID requirement
- 625 ILCS 5/5-102.8, Buy Here, Pay Here dealers — the one combined license for selling and financing
- Repairer, Rebuilder, Automotive Parts Recycler, Scrap Processor, or Auctioneer Application (RT DS 38) — the application for that license family
